The benchmark cotton contract on ICE Futures US eased to a fresh 7-1/2-month low as commodities continued to decline and worries persisted over demand, particularly in top consumer China where economic growth is slowing. The second-month dropped as low as 59.78 cents per lb, the weakest since early February, before settling below the key psychological level of 60 cents.
The bellwether Thomson Reuters CoreCommodity CRB Index commodities index declined, as investors continued selling. "Cotton is so dependent on China. Until we get good news there, lower lows could continue," Michael Smith, president at T&K Futures and Options in Port St. Lucie, Florida. "Commodities in general are going to have a hard time going up" due to a strong dollar, he added.
The ICE cotton contract for December settled down 0.03 cent on Wednesday, a 0.05 percent loss, to 59.97 cents per pound. It traded within a tight range of 59.78 and 60.44 cents a pound. The cash to second-month spread fell 0.02 cent to 1.36 cents per pound. Total futures market volume fell by 4,361 to 17,214 lots. Data showed total open interest gained 1,361 to 182,136 contracts in the previous session. Certificated cotton stocks deliverable as of September 22 totalled 48,438 480-lb bales, down from 49,184 in the previous session. The dollar index was down 0.10 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 1.25 percent.
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